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published in Blogs
Dec 29, 2020

Bearish Signals from the Bollinger Bands for 5 Renewable Energy Equipment Stocks

The renewable energy industry has performed incredibly well over the last 10 months. After bottoming at $21.11 in March, the Invesco Solar ETF (TAN) has rallied over 400%. As you can imagine, such a rally has caused the ETF and most of the stocks in the group to reach overbought levels on their weekly charts. In most cases they are also overbought on the daily and monthly charts as well.

I ran a scan on December 24 for stocks in overbought territory that also had their daily stochastic indicators make bearish crossovers. On that list were five different renewable energy equipment stocks and the Invesco Solar ETF. The five stocks were:

            First Solar (FSLR)

            JinkoSolar (JKS)

            Sunnova Energy International (NOVA)

            Plug Power (PLUG)

            Sunpower (SPWR)

When I pulled up these five stocks on the Tickeron Technical Analysis Screener, I couldn’t help but notice all five stocks had received bearish signals from the Bollinger Bands indicator within the last three days. Two of the five, Sunnova and JinkoSolar, had bearish signals generated on December 28.

The Tickeron Scorecard has Plug Power ranked as a “sell” and First Solar is ranked as a “strong buy”. The other three have “buy” ratings. Despite the scorecard grades, there are some areas of concern on the fundamental side. All five stocks have poor SMR ratings and four of the five have poor P/E Growth Ratings. We also see that three of the five are overvalued at this time.

I looked at the analysts’ ratings and the short interest ratios for these five stocks in order to get a sense of the sentiment toward them. There is quite a bit of pessimism toward First Solar and Sunpower while the sentiment is neutral on JinkoSolar.

Sunnova Energy and Plug Power both have quite a bit of optimism directed at them right now. Both companies have 11 analysts following them with 10 of the 11 rating the stock as a “buy”. In both instances there is one “hold” rating on each stock. The short interest ratio for Sunnova is very low at 1.6 and Plug’s is below average at 2.49.

What all of this tells me is that if the bearish crossovers from the stochastic indicators and the bearish signals from the Bollinger Bands turn out to be accurate, it will be driven primarily from technical factors. The overbought levels could cause some investors to take profits.

To give you an idea of how the stocks compare to one another and to other stocks in general, I used the comparison feature on Tickeron to compare Plug, Sunnova, and First Solar. If you recall Plug was rated as a “sell”, Sunnova was rated as a “buy”, and First Solar is rated as a “strong buy”.

Related Ticker: TAN

TAN's RSI Oscillator climbs out of oversold territory

The RSI Oscillator for TAN moved out of oversold territory on January 22, 2024. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 29 similar instances when the indicator left oversold territory. In of the 29 cases the stock moved higher. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TAN advanced for three days, in of 309 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on February 22, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on TAN as a result. In of 79 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for TAN turned negative on February 23, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .

TAN moved below its 50-day moving average on February 16, 2024 date and that indicates a change from an upward trend to a downward trend.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where TAN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

TAN broke above its upper Bollinger Band on February 12, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for TAN entered a downward trend on February 14, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

Notable companies

The most notable companies in this group are Enphase Energy (NASDAQ:ENPH), First Solar (NASDAQ:FSLR), SolarEdge Technologies (NASDAQ:SEDG), Canadian Solar (NASDAQ:CSIQ), SunPower Corp (NASDAQ:SPWR).

Industry description

The investment seeks to track the investment results (before fees and expenses) of the MAC Global Solar Energy Index. The fund will generally invest at least 90% of its total assets in the securities that comprise the underlying index. Strictly in accordance with its guidelines and mandated procedures, MAC Indexing LLC, has contracted with S&P DJI Netherlands B.V. to calculate and administer the underlying index, which seeks to track the performance of companies in global solar energy businesses. The fund is non-diversified.

Market Cap

The average market capitalization across the Invesco Solar ETF ETF is 4.74B. The market cap for tickers in the group ranges from 220.62M to 16.05B. ENPH holds the highest valuation in this group at 16.05B. The lowest valued company is MAXN at 220.62M.

High and low price notable news

The average weekly price growth across all stocks in the Invesco Solar ETF ETF was -10%. For the same ETF, the average monthly price growth was -5%, and the average quarterly price growth was -25%. RNW experienced the highest price growth at 0%, while NOVA experienced the biggest fall at -34%.

Volume

The average weekly volume growth across all stocks in the Invesco Solar ETF ETF was 68%. For the same stocks of the ETF, the average monthly volume growth was 51% and the average quarterly volume growth was 130%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 58
P/E Growth Rating: 85
Price Growth Rating: 68
SMR Rating: 61
Profit Risk Rating: 82
Seasonality Score: -45 (-100 ... +100)
Related Portfolios: RENEWABLE ENERGY
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TANDaily Signal changed days agoGain/Loss if shorted
 
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A.I.Advisor
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A.I. Advisor
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General Information

Category Miscellaneous

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Fundamentals
Details
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Address
PowerShares Exchange-Traded Fund Tr II301 West Roosevelt RoadWheaton
Phone
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Web
www.invescopowershares.com
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Correlation & Price change

A.I.dvisor indicates that over the last year, TAN has been closely correlated with ICLN. These tickers have moved in lockstep 96% of the time. This A.I.-generated data suggests there is a high statistical probability that if TAN jumps, then ICLN could also see price increases.

1D
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NAME
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1D Price
Change %
TAN100%
-1.55%
ICLN - TAN
96%
Closely correlated
-1.08%
CTEC - TAN
93%
Closely correlated
-2.13%
VCLN - TAN
92%
Closely correlated
-1.03%
QCLN - TAN
88%
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-2.36%
ACES - TAN
88%
Closely correlated
-1.86%
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